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<br />. <br /> <br />for the explanatory variables can be obtained through county tax-assessors' records and <br /> <br />census data. <br /> <br />As noted above, both Freeman (1993) and Palmquist (1991) suggest that a nonlinear <br /> <br />functional form is appropriate. Freeman and Palmquist agree that a Box-Cox Transformation <br /> <br />works well in selecting the appropriate functional form. <br /> <br />In general, the Box-Cox Transformation takes the form (Johnston 1984): <br /> <br />(2) y<XI) = Ct. + {IX()2l + u <br /> <br />Depending on the estimated values for ^I and ^2' the best functional form can be determined. <br />For example, if ^I =^2 =0, the form would be a log-log model. <br /> <br />Hedonic Price Analysis for Urban Water Issues <br />. Early studies using the hedonic price approach have focused on air quality issues, yet <br />the method is equally applicable to water quality issues. Dornbusch and Barrager (1973) <br />used multiple regression analysis to estimate the benefit of water pollution abatement. They <br />concluded that property values of single family residents on waterfront lots increased by 8 to <br />25 % with water pollution control. <br />In 1980, Feenberg and Mills also conducted a study to measure the benefits of water <br />pollution abatement using property data. They found the determinants of demand were water <br />quality at the nearest beach and number of people per dwelling. The authors concluded that <br />the willingness to pay for slightly cleaner water rises rapidly as water becomes dirtier. <br />To determine the impact of degraded water quality on the value of seasonal residential <br />properties, Young and Teti (1984) studied the shoreline properties of 51. Albans' Bay in <br /> <br />. <br /> <br />5 <br />